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The price range ( confidential wholesale to MSRP ) of an '08 X3 with specific options is $42,025 to $45,685 - I would think that of the 3 options (1) finance (2) trade-in and (3) full cash , that cash would be the better deal for a dealership.

Assuming that is correct, would $43,000 "out the door" be a reasonable offer ?

PS : I'm not sure what "wholesale" represents ? In other words it's hard for me to believe that a dealership pays BMW $42,025 - with a max margin of $3,500+ ???

Cash is usually the worst option for a dealership. Zero back-end profit. Zero profit on your trade-in. A lease also increases the chances you will be back in two or three years to buy another BMW. Dealers will of course take cash. They want to make a sale.

Cash can be a bad option for the buyer too. BMW often has incentive financing. Look carefully at the current finance and lease incentives before paying cash.

Dealer invoice+$1000 is ballpark for an X3. We paid a little more than that for ours, but the market was better a year ago.

Dealers have other ways to make profit besides the spread between MSRP and Invoice:

Here are a few...

Dealer Documentation Fees.
Other dealer fees, like prep.
Finance markup.
F&I add ons like warranties and paint protection.
Dealer added accessories.
Service on the car. BMW NA will pay them for service...

Dealer might be eligible for a bonus back from BMW NA. -- There are 2. One is based on volume, the other is based on the Customer Satisfaction Survey. If you give them all 5's they get the bonus.

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The models and equipment (standard and optional) illustrated in this post reflect my misunderstanding of vehicles supplied by BMW AG to the German market. In other EU member states, the truthyness of my posts may vary. Please ignore this post. Subject to change.

Cash is usually the worst option for a dealership. Zero back-end profit. Zero profit on your trade-in. A lease also increases the chances you will be back in two or three years to buy another BMW. Dealers will of course take cash. They want to make a sale.

Cash can be a bad option for the buyer too. BMW often has incentive financing. Look carefully at the current finance and lease incentives before paying cash.

I was thinking about it this way - first take trade-in - since the dealership is taking on an unknown, they're not going to give the buyer the best deal - now take cash vs financing - would you rather have $1 now or a $1 a year from now - based on the time value of money I would think the dealership would prefer cash.

However, I've come to the conclusion that paying cash may only provide a modest benefit to the buyer in negotiations for a new X3 - in other words, if invoice to MSRP is $42 to $45.7 then I don't think you'll get the car for less than $42 - and VW operates the same way - I recently helped our daughter buy a Jetta and they're spread ( invoice to MSRP) is even thinner - and they wouldn't go below invoice.

With the same $42 to $45.7 example above, the sweet spot at least here in Connecticut seems to be $43 - $43.3 ; but I think $42.5 with cash may be worth a try.

I was thinking about it this way - first take trade-in - since the dealership is taking on an unknown,

The dealer knows the latest wholesale auction prices for your trade. They will offer you around that price or less. Very little risk for them.

Quote:

would you rather have $1 now or a $1 a year from now - based on the time value of money I would think the dealership would prefer cash.

Dealer can unload a used car at auction quickly.

In any case, you should look at your trade and the new car purchase as two separate transactions. You don't have to sell you car to the dealer you are purchasing from.

Quote:

However, I've come to the conclusion that paying cash may only provide a modest benefit to the buyer in negotiations for a new X3 - in other words,

As I said earlier, paying cash offers you no benefit at all. Well you aren't paying interest on a car loan. Even then I'm not sure.

Current BMW FS purchase finance is something like 3.9%. Might be better to finance and then invest your $42,000 rather than buy the car outright.

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The models and equipment (standard and optional) illustrated in this post reflect my misunderstanding of vehicles supplied by BMW AG to the German market. In other EU member states, the truthyness of my posts may vary. Please ignore this post. Subject to change.

great info! how much is MACO and training? how much incentive do they get for high surveys? Any idea on volume incentive?

Doesn't anybody search anymore?

The training fee is $180. It is on the price lists posted in the sticky at the top of this forum.

MACO varies by region. Range is zero to about $500. Here in Atlanta it is $300.

The size of the incentives is still secret. Combined they are about the size of the wholesale ED discount. $2400 on an X3. ED cars don't have the incentives... Guess where the ED discount comes from.

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The models and equipment (standard and optional) illustrated in this post reflect my misunderstanding of vehicles supplied by BMW AG to the German market. In other EU member states, the truthyness of my posts may vary. Please ignore this post. Subject to change.

Having worked at a dealership, they HATE cash deals. As A*D said, there is no FI back-end for them where they can make a fair bit more. I would negotiate the final price, then tell them it is a cash deal. That way they won't be tempted to NOT come down as far as they possibly could. Work a couple of dealers against each other will work well here too as they may be willing to do a better deal just to make a sale over another dealer.